WEBVTT - Election and Big Tech Impacting Markets 0:00:00.120 --> 0:00:13.200 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.240 --> 0:00:17.560 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:17.680 --> 0:00:21.880 on Applecarplayer, Android Auto with the Bloomberg Business App. Listen 0:00:21.920 --> 0:00:25.000 on demand wherever you get your podcasts, or watch us 0:00:25.120 --> 0:00:26.239 live on YouTube. 0:00:26.640 --> 0:00:27.280 This is a join. 0:00:27.360 --> 0:00:30.520 Nick Kolis joins us right now, thrilled that it could 0:00:30.560 --> 0:00:31.760 be with us. First of all, let me tell you 0:00:31.800 --> 0:00:34.040 about the jobs report coming up on Friday. It's at 0:00:34.040 --> 0:00:36.680 eight thirty, and that means here at a thirty on 0:00:36.720 --> 0:00:39.920 our economic indicators. They're brought to you by Commonwealth Join. 0:00:40.000 --> 0:00:44.159 Over two thousand independent financial advisors are taking control of 0:00:44.200 --> 0:00:48.800 their growth with advisor centric support, future ready technologies. Grow 0:00:48.880 --> 0:00:52.720 on your own terms with a partner dedicated to your success. 0:00:52.760 --> 0:00:56.920 Go to Commonwealth dot com to learn how we got 0:00:56.960 --> 0:00:59.120 to cover up something first. I mean people go to 0:00:59.160 --> 0:01:02.800 way to school and you know, they, you know, like 0:01:02.800 --> 0:01:05.960 they they're like it's good when there's other schools around. 0:01:06.640 --> 0:01:09.560 So if you go to Haverford like you did, and 0:01:09.600 --> 0:01:15.800 you're studying absolutely bizarre majors like Nick Coolis, did you 0:01:16.040 --> 0:01:19.959 end up You're walking the two miles Turnbridge Road to 0:01:20.000 --> 0:01:23.679 College Avenue to Haverford Road. You're going north, deep north 0:01:23.720 --> 0:01:26.800 to Brynmar to studies. Did you do most of you 0:01:26.880 --> 0:01:30.000 studying at Brynmar? Yes, that was where I majored Seven 0:01:30.120 --> 0:01:30.839 Sisters School. 0:01:31.000 --> 0:01:34.280 They had the best archaeology undergrad program in the country 0:01:34.319 --> 0:01:36.440 when I was applying the schools, and so I studied 0:01:36.440 --> 0:01:39.080 with the very best people in the field for four years. 0:01:39.080 --> 0:01:41.960 It was awesome women there, it is there. 0:01:42.240 --> 0:01:45.280 Yes, Haverford had gone co ed three years before I 0:01:45.280 --> 0:01:47.360 got there. I saw the last all male class graduates, 0:01:47.920 --> 0:01:51.760 and then Brynmar was was single sex obviously, and so 0:01:51.880 --> 0:01:53.320 it was an interesting dynamic. 0:01:53.440 --> 0:01:55.680 I'll see what you did there, Okay, I mean it's 0:01:55.360 --> 0:01:58.800 a it's a plethora of people. You're Jody Lurie. You 0:01:58.840 --> 0:02:02.120 know Britmar Grey shows off sometimes without the horse. 0:02:02.440 --> 0:02:04.720 Yep. But this is a Philadelphia thing. 0:02:04.720 --> 0:02:08.639 Do you have any perspective on the Pennsylvania vote coming up? 0:02:09.040 --> 0:02:12.120 The axis of Philadelphia out to Pittsburgh havn't been a 0:02:12.160 --> 0:02:14.280 mainline academic. 0:02:14.240 --> 0:02:17.000 Mainline is sort of like Manhattan. It is its own 0:02:17.080 --> 0:02:18.359 little isolated world. 0:02:18.480 --> 0:02:22.680 So no, do you think it's definitive within the election. 0:02:22.840 --> 0:02:24.840 I don't hear a lot of people talking about it. 0:02:25.120 --> 0:02:28.360 No, no, it's okay. Let's go to your research on 0:02:28.400 --> 0:02:28.919 Nick Coolas. 0:02:28.919 --> 0:02:31.040 Of course, we protect the copyright of all I guess 0:02:31.080 --> 0:02:34.160 get it from Nick Colis at Data Trek Research. You 0:02:34.200 --> 0:02:39.680 have a stunning industry sector chart that in red shows 0:02:39.720 --> 0:02:44.160 you the max overweight of technology. What does Nick Colis 0:02:44.160 --> 0:02:47.800 do with the reality of a persistent tech overweight. 0:02:48.240 --> 0:02:50.560 Yes, it is dramatic, and it's obviously we're talking about 0:02:50.560 --> 0:02:53.160 the SP five hundred versus anything else, any other index 0:02:53.200 --> 0:02:57.760 anywhere in the world, MSCI Europe, Japan, Emerging Markets, everything. 0:02:58.800 --> 0:03:01.839 Tech is a heavyweight in the US more than anyplace else. 0:03:01.880 --> 0:03:03.760 And the bottom line is you have to live with it. 0:03:04.120 --> 0:03:06.680 And there's a reason why these companies have gotten so big. 0:03:06.760 --> 0:03:10.720 They are disruptive innovators at scale, and they own most 0:03:10.720 --> 0:03:13.400 of the Internet, and it's really hard to back away 0:03:13.400 --> 0:03:15.720 from that. Here in the US we talk about it 0:03:15.720 --> 0:03:17.760 a lot as a negative. When I visit clients in Europe, 0:03:17.880 --> 0:03:21.080 everybody resolutely thinks it's a positive, and they think, thank 0:03:21.120 --> 0:03:23.400 God for US equities, because if there weren't for the 0:03:23.480 --> 0:03:26.400 s people five hundred, I'd be stuck owning MSCI Europe 0:03:26.600 --> 0:03:29.720 earning five to eight percent instead of owning the US, 0:03:29.760 --> 0:03:32.560 which is compounding at thirteen. So we think of it 0:03:32.560 --> 0:03:34.920 as a problem here, nobody else sins it's a problem. 0:03:35.000 --> 0:03:37.600 And it's funny because my personal opinion is one of 0:03:37.600 --> 0:03:39.600 the reasons we have such a robust tech business is 0:03:39.600 --> 0:03:43.040 because of the government. The government has historically taken a 0:03:43.120 --> 0:03:46.640 light touch to regulating technology, which I in my opinion, 0:03:46.640 --> 0:03:49.840 has allowed silicon value to become Silicon Valley, whereas in Europe, 0:03:49.920 --> 0:03:53.160 I've got SAP, I've got ASML, and I think that's 0:03:53.360 --> 0:03:59.600 kind of it. Okay, So we'll see how that plays 0:03:59.600 --> 0:04:01.880 out going for You've got something in your note which 0:04:01.880 --> 0:04:05.400 Tom reference offshore gambling odds on the presidential elections. 0:04:06.040 --> 0:04:06.880 Are they important? 0:04:07.080 --> 0:04:08.200 Are they impacting the market? 0:04:08.480 --> 0:04:08.960 It's funny. 0:04:08.960 --> 0:04:12.160 I've followed prediction markets for years back to predict it, 0:04:12.280 --> 0:04:16.240 some of the Iowa original Iowa analysis, and I've never 0:04:16.279 --> 0:04:18.599 seen as much interest in this as right now in 0:04:18.640 --> 0:04:21.640 this election. The prediction markets, the bank markets are really 0:04:21.680 --> 0:04:25.640 blown up, and I wonder how isolated or insulated they 0:04:25.640 --> 0:04:28.200 are from influence from people who know that they are 0:04:28.200 --> 0:04:29.560 now affecting capital markets. 0:04:29.640 --> 0:04:32.680 Well, there's people putting gazillions of dollar trades into one 0:04:32.720 --> 0:04:35.359 of the predicted markets, Nick Coleas, is it you? 0:04:36.480 --> 0:04:40.040 Sadly it is not me. Polymarket is the big market 0:04:40.080 --> 0:04:42.440 for that. And I think there's been reports of a 0:04:42.480 --> 0:04:46.000 whale buying between thirty and forty million dollars or Trump trades. 0:04:46.360 --> 0:04:50.400 And evidently he's a sophisticated French investor, French trader. And 0:04:50.520 --> 0:04:52.960 I've wondered, and I've written this, I wonder how much 0:04:53.040 --> 0:04:57.120 perhaps people are influencing the Trump contract because they know 0:04:57.120 --> 0:04:59.920 it spills over and to pay so and bank stock 0:05:00.240 --> 0:05:02.640 and the Yell curve and the Lolong end of the 0:05:02.680 --> 0:05:05.719 Yuell curve. I wonder how accurate prediction markets will be 0:05:05.800 --> 0:05:06.920 now that they're hooked up to the rest of the 0:05:06.920 --> 0:05:07.640 financial system. 0:05:07.760 --> 0:05:08.159 Interesting. 0:05:08.200 --> 0:05:12.160 So, I mean, as an investor, how do you think 0:05:12.200 --> 0:05:15.560 about this US election? It feels kind of binary a 0:05:15.600 --> 0:05:18.080 little bit. There's I mean, depending on who wins the election, 0:05:18.920 --> 0:05:22.000 there's different policies there. And is that factoring into your 0:05:22.000 --> 0:05:23.120 investment outlook, the. 0:05:23.040 --> 0:05:25.159 Way we described as the clients was there's a very 0:05:25.200 --> 0:05:27.920 clear set of Trump trades because we saw what happened 0:05:27.920 --> 0:05:30.520 in the market after he won in twenty sixteen. Yell 0:05:30.560 --> 0:05:34.440 curve backed up, financials ripped energy ripped. It's a very 0:05:34.440 --> 0:05:37.000 clear trade, and it's kind of happening right now. There's 0:05:37.080 --> 0:05:40.960 not as clear a Harris or Biden trade because when 0:05:41.040 --> 0:05:42.840 Biden was elected in twenty twenty, we're in the middle 0:05:42.839 --> 0:05:45.320 of the pandemic. The vaccines were rolling out in between 0:05:45.360 --> 0:05:47.680 election day and the rest of the year. There's no 0:05:47.800 --> 0:05:50.560 clear Harris trade, right but there is a clear Trump trade, 0:05:50.560 --> 0:05:53.359 which I think has forced people to say, Okay, at 0:05:53.440 --> 0:05:55.520 least we know what to do if he wins. And 0:05:55.560 --> 0:05:57.719 that's why they've been working at Trump trade because there's 0:05:57.720 --> 0:05:59.760 some clarity there versus no clarity of Harris. 0:06:00.080 --> 0:06:00.920 What are you doing? 0:06:01.000 --> 0:06:06.160 What is the Nick Cholis action to invest new money 0:06:06.320 --> 0:06:09.440 in the stock market? Looking out six months, looking out 0:06:09.480 --> 0:06:09.920 a year. 0:06:09.880 --> 0:06:10.400 Two years. 0:06:10.560 --> 0:06:12.240 Yeah, the way we're looking at it is, let's sort 0:06:12.240 --> 0:06:14.160 of get past the election. So we're talking about, like 0:06:14.200 --> 0:06:16.400 I said, a one to two year timeframe, and there 0:06:16.440 --> 0:06:18.000 the playbook is pretty straightforward. 0:06:18.000 --> 0:06:18.440 For US. 0:06:18.680 --> 0:06:22.200 It's long US equities, it's small caps for a trade, 0:06:22.520 --> 0:06:28.000 it's financials, it's industrials. But really be very careful with Europe, Japan, 0:06:28.160 --> 0:06:30.359 and em because aside from China, there's not a lot 0:06:30.440 --> 0:06:31.120 good going on there. 0:06:31.400 --> 0:06:31.800 Nick you. 0:06:31.800 --> 0:06:33.760 You and I have talked about this before. They're the 0:06:33.839 --> 0:06:38.159 brats out in Silicon Valley. Everything's great. They got ping pong. 0:06:38.480 --> 0:06:40.080 You know what are the football They. 0:06:40.000 --> 0:06:43.719 Got foosball machines in the lobby. Data Truk doesn't have that, folks. 0:06:43.800 --> 0:06:45.800 And all of a sudden they've grown up. Thank you, 0:06:45.880 --> 0:06:50.920 mister Zuckerberg. And we saw yesterday with Google margins coming 0:06:50.960 --> 0:06:55.039 in count excuse me, folks, and gasp went off. The 0:06:55.040 --> 0:06:58.440 plague headcount coming in as well. There's a new sobriety 0:06:58.520 --> 0:07:00.920 in tech. Can you invest in that new sobriety? 0:07:01.160 --> 0:07:03.480 I think it is certainly helpful and improved return on capital, 0:07:03.520 --> 0:07:05.960 It improves margins, It shows that there's some grown ups 0:07:06.000 --> 0:07:08.280 in the room with some discipline, and that's great. But 0:07:08.360 --> 0:07:11.600 ultimately you're buying tech for jen Ai and for the 0:07:11.640 --> 0:07:14.320 next level of autonomous driving and a whole bunch of 0:07:14.320 --> 0:07:17.920 other things. The only thing the market consistently gets wrong 0:07:18.480 --> 0:07:21.600 in any sector is in technology because it's so hard 0:07:21.640 --> 0:07:24.000 to predict the future of technology. So if you look 0:07:24.000 --> 0:07:26.960 at ten year returns, tech has it over everything by 0:07:27.000 --> 0:07:30.120 a wide margin because the market doesn't know what's coming next, 0:07:30.120 --> 0:07:31.600 and every other sector it's a lot harder. 0:07:32.560 --> 0:07:34.840 I've got a FED that's cutting rates. They cut initially 0:07:34.920 --> 0:07:38.160 by fifty basis points. Yet my two year treasury in 0:07:38.280 --> 0:07:40.240 four point one four percent. What happened there? I mean, 0:07:40.280 --> 0:07:41.920 I'm an equity guy, so I have no idea what's 0:07:41.960 --> 0:07:42.280 going on? 0:07:42.640 --> 0:07:45.840 Yeah, the issue is economic growth picked up and it 0:07:45.960 --> 0:07:48.040 still remains strong. We see what with the ADP numbers. 0:07:48.040 --> 0:07:50.640 We see it with the GDP numbers, even though they're 0:07:50.640 --> 0:07:53.040 a little bit light versus expectations are still very robust. 0:07:53.480 --> 0:07:57.080 Let's review that three percent two point nine percent was 0:07:57.120 --> 0:07:59.760 a survey. It comes in two point eight percent, and 0:07:59.760 --> 0:08:01.680 I'm looking at Paul. It's like a big red light 0:08:01.720 --> 0:08:07.840 going on personal consumption three point seven percent most in 0:08:07.840 --> 0:08:10.320 the old days, that's a boom and Coonamy Right, Nick. 0:08:10.360 --> 0:08:12.320 Yes, I mean this is one of those what else 0:08:12.360 --> 0:08:14.960 do you need to know? Kind of reports. You look 0:08:15.000 --> 0:08:16.880 at this and say, fine, I know everything I need 0:08:16.920 --> 0:08:18.119 to know for the next ninety days. 0:08:18.960 --> 0:08:20.800 So what are you doing. I guess in the near 0:08:21.640 --> 0:08:24.680 for the next week, or you're telling clients just de 0:08:24.880 --> 0:08:26.480 risk to the extent you can de risk until we 0:08:26.520 --> 0:08:28.080 figure out what's going to happen in a week. 0:08:28.240 --> 0:08:29.960 We try very hard not to play the game that 0:08:30.000 --> 0:08:33.560 way because some of our clients are traders. My background 0:08:33.600 --> 0:08:36.280 is some degree in trading, so we are telling them, okay, 0:08:36.320 --> 0:08:38.320 this is why yields it backed up, and the financials 0:08:38.320 --> 0:08:39.880 have worked, that energy has worked. So if you're along 0:08:39.960 --> 0:08:42.880 those trades lightened up because who knows. But aside from that, 0:08:42.880 --> 0:08:45.000 we try very hard to say, look, ultimately, like the 0:08:45.080 --> 0:08:48.280 Larry Summers quote is right, Europe's and museum Japan's are 0:08:48.320 --> 0:08:52.000 nursing home, China is a prison, and the US he 0:08:52.040 --> 0:08:54.280 didn't say this, but this is my addendum. The US 0:08:54.320 --> 0:09:01.960 is a business. Larry Summers, Europe, muse, Japan's a nursing home, 0:09:02.320 --> 0:09:06.000 China's a prison. And my addendum to it is America 0:09:06.120 --> 0:09:09.040 is a business. And the reason that American markets work 0:09:09.080 --> 0:09:12.560 better than others is simply because they overwhelm the political side. 0:09:12.720 --> 0:09:17.400 Twenty seconds near Eastern archaeology, can there be a new Syria? 0:09:18.800 --> 0:09:19.439 Ooh? 0:09:20.160 --> 0:09:22.280 I think what archaeologies haven't win anything else is that 0:09:22.360 --> 0:09:25.320 empires rise and fall, but they're very unpredictable, and you 0:09:25.360 --> 0:09:27.800 can have empires that go two thousand years, like Egypt. 0:09:28.320 --> 0:09:30.760 So it's fascile to say, Okay, the Rooman empire only 0:09:30.840 --> 0:09:33.360 lasts a couple hundred years. There are examples of things 0:09:33.440 --> 0:09:35.040 lasting a really long time. 0:09:35.240 --> 0:09:39.160 Nick Cools, including Bloomberg Surveillance. Nick Cools, thank you so much. 0:09:39.559 --> 0:09:41.600 Data tech research just really really important. 0:09:41.640 --> 0:09:48.520 We'll feature him in single Best Idea our podcasts out today. 0:09:50.800 --> 0:09:54.640 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:09:54.760 --> 0:09:58.080 weekday afternoons from seven to ten am. Easter Listen on 0:09:58.120 --> 0:10:01.360 Apple car Play and Androt Auto with a Bloomberg business app, 0:10:01.480 --> 0:10:03.280 or what's just live on YouTube. 0:10:03.400 --> 0:10:08.560 I'm looking at Google pre pandemic thirty one billion in 0:10:08.640 --> 0:10:11.520 free cash flow. We got a model here many if 0:10:11.600 --> 0:10:14.320 Singh's got a model of seventy six billion, it's like 0:10:14.360 --> 0:10:17.400 a double plus yea coming out of the pandemic. Are 0:10:17.400 --> 0:10:20.679 they hiding how successful they are? Is the bottom line? 0:10:20.760 --> 0:10:23.719 We're gonna see it with Microsoft today, Apple tomorrow. They 0:10:23.760 --> 0:10:28.200 really don't want Washington to know how big and how 0:10:28.240 --> 0:10:29.600 fast they're growing, do they? 0:10:29.880 --> 0:10:30.080 Yeah? 0:10:30.120 --> 0:10:32.679 And they know how to turn on the dials when 0:10:32.720 --> 0:10:34.960 it comes to top line or free cash flow. And 0:10:35.000 --> 0:10:37.520 that's what they showed last night is the. 0:10:37.559 --> 0:10:41.000 Merging build out versus employee headcout was an active. 0:10:40.760 --> 0:10:43.600 Gay, Yeah, I mean all the new In fact, twenty 0:10:43.640 --> 0:10:47.000 five percent of new code is written by AI. For 0:10:47.120 --> 0:10:50.480 a company of Google scale to say, twenty five percent 0:10:50.520 --> 0:10:53.520 of new code is written by AI. That just goes 0:10:53.559 --> 0:10:56.480 to show how far ahead they are when it comes 0:10:56.480 --> 0:10:59.640 to deploying these technologies, and then what it means for 0:10:59.679 --> 0:11:03.120 the head count going forward. I mean, these companies will 0:11:03.200 --> 0:11:05.840 not grow headcount at least in the next two three. 0:11:05.720 --> 0:11:08.240 So you know, we hear anecdotally. Paul and I read 0:11:08.320 --> 0:11:09.959 on the weekend. Paul's at the beach, He's got a 0:11:10.120 --> 0:11:13.280 vest bice're having the morning coffee and we're reading the 0:11:13.400 --> 0:11:16.160 tech and software engineers or having trouble getting jobs. 0:11:16.480 --> 0:11:18.000 Can you say it's because of AI? 0:11:18.640 --> 0:11:21.520 They will certainly be more efficient and there won't be 0:11:21.600 --> 0:11:24.520 as many jobs at the same time. I think what 0:11:24.600 --> 0:11:27.720 he called that was everyone is more productive when it 0:11:27.760 --> 0:11:31.120 comes to writing code as a result of this, And yes, 0:11:31.240 --> 0:11:35.520 that translates into some jobs changing because of you know, 0:11:35.559 --> 0:11:38.880 the dynamic that code can be completed by AI system. 0:11:39.520 --> 0:11:43.920 I think code can do like newscasts John Tucker's jobs AI. 0:11:45.320 --> 0:11:46.600 We tried that in the. 0:11:46.559 --> 0:11:48.680 Old building or some version of it, and it was 0:11:48.720 --> 0:11:49.800 just as a disaster. 0:11:50.040 --> 0:11:53.600 Man, we talked about Alphabet. It's still the search business. 0:11:53.760 --> 0:11:56.360 And I think I'm looking at the stock it's only 0:11:56.440 --> 0:11:58.360 up twenty percent year to date because I think some 0:11:58.400 --> 0:12:02.000 investors are concerned about the core search business and the 0:12:02.040 --> 0:12:04.559 threat from AI. What did you hear last night from 0:12:04.559 --> 0:12:05.840 the company about that issue? 0:12:05.960 --> 0:12:09.120 I mean for business. So for two hundred billion dollar 0:12:09.200 --> 0:12:12.079 run rate growing double digits, that just goes to show 0:12:12.080 --> 0:12:15.520 that that threat was just a narrative. It's really not 0:12:15.640 --> 0:12:19.199 translating into any AD dollars going away. And what they 0:12:19.240 --> 0:12:22.600 call that was the lengthening of engagement when it comes 0:12:22.600 --> 0:12:25.800 to search. Typically, with the traditional search, you would see 0:12:25.840 --> 0:12:27.840 the blue links, they'll show you an AD, you will 0:12:27.880 --> 0:12:31.480 go to the publisher website. Now people are engaging in 0:12:31.520 --> 0:12:34.200 a more complex way. That's what they said, that the 0:12:34.320 --> 0:12:39.000 time spent in searching, the complexity of queries is getting bigger, 0:12:39.240 --> 0:12:42.480 and that is what's helping their AD loads when it 0:12:42.520 --> 0:12:44.600 comes to you know, the overall at revenue. 0:12:44.679 --> 0:12:46.520 Man, if we don't care, the only reason you're here 0:12:46.679 --> 0:12:50.680 is Paul in my in John Tucker's entire future is 0:12:50.760 --> 0:12:53.199 based on this bet on YouTube. We said good morning, 0:12:53.240 --> 0:12:58.320 and we value everyone. Yeah, subscribing to Bloomberg podcasts on YouTube. 0:12:58.320 --> 0:13:01.800 Michael Nathans suggests YouTube swings to profit this year. Was 0:13:01.840 --> 0:13:06.199 there evidence there that John Tucker's making profit YouTube? 0:13:06.400 --> 0:13:10.320 Yes. In fact, along with the cloud acceleration from twenty 0:13:10.640 --> 0:13:14.680 nine to thirty five percent, this quarter, YouTube subscriptions grew 0:13:14.760 --> 0:13:17.920 twenty eight percent. Just think about it. It's a fifteen 0:13:17.960 --> 0:13:21.600 billion dollar plus run rate business. Just a subscriptions piece. 0:13:21.640 --> 0:13:24.400 I'm taking out the YouTube ads, which is another forty 0:13:24.440 --> 0:13:29.440 billion dollars. Subscriptions piece grew twenty eight percent. Now compare 0:13:29.480 --> 0:13:32.680 that to Netflix. I mean, it's growing midteens, fifteen percent 0:13:33.040 --> 0:13:35.920 higher run rate, but still that just goes to show 0:13:36.000 --> 0:13:39.680 how much traction they have with YouTube. So clearly that's working. 0:13:39.880 --> 0:13:40.240 All right. 0:13:40.240 --> 0:13:42.000 I was using Google Search last night. I'm trying to 0:13:42.000 --> 0:13:46.160 figure out something. What is AI overviews that's coming in? 0:13:46.440 --> 0:13:47.640 I don't know what that is? What is that? 0:13:47.840 --> 0:13:51.280 So basically what they've changed is the search page will 0:13:51.280 --> 0:13:55.120 have a summary of you know, whatever query you have. 0:13:55.240 --> 0:13:57.720 The prompt can be any length, and they show you 0:13:57.800 --> 0:14:00.679 an overview of all the blue line that they are 0:14:00.720 --> 0:14:05.560 showing you underneath that. So they have basically combined generative 0:14:05.640 --> 0:14:08.920 AI along with their traditional search and then that JENNYI 0:14:09.080 --> 0:14:10.800 overview is the generative AI. 0:14:11.240 --> 0:14:13.720 No way, John Tucker's using generative AI. I can just 0:14:13.720 --> 0:14:15.760 tell you that right now, what do you think? 0:14:17.200 --> 0:14:20.360 Maybe I am and I don't know exactly I would 0:14:20.440 --> 0:14:21.120 concur with that. 0:14:21.320 --> 0:14:25.360 Yeah, Microsoft today, what is I mean, it's off your. 0:14:25.200 --> 0:14:27.200 Remit right, you're not following Microsoft. 0:14:27.440 --> 0:14:30.320 I mean, if you're looking at cloud, you have to 0:14:30.600 --> 0:14:31.560 look at Microsoft. 0:14:31.760 --> 0:14:33.840 So what are you looking at here? At four fifteen? 0:14:33.960 --> 0:14:37.400 The Azure growth and the bogie is higher than what 0:14:37.480 --> 0:14:40.360 consensus numbers are, which is thirty one percent growth for 0:14:40.600 --> 0:14:43.640 eighty billion dollars rundread business. I think the bogie is 0:14:43.680 --> 0:14:48.160 thirty four percent because alphabet Google's cloud business grew thirty 0:14:48.160 --> 0:14:51.080 five percent last night. So anything less than that would 0:14:51.080 --> 0:14:53.360 be perceived as somewhat of a share shift. 0:14:53.520 --> 0:14:55.320 So translate this back he's talking to. 0:14:58.240 --> 0:15:01.840 They need to get thirty five percent growth in what part. 0:15:01.640 --> 0:15:04.040 Of my Azure cloud business? 0:15:04.040 --> 0:15:07.960 Azure Azure Okay, yes, and that's a much so think 0:15:08.000 --> 0:15:11.680 of Google Cloud as a forty five billion dollar rundred business. 0:15:12.320 --> 0:15:15.840 Azure Cloud is an eighty billion dollar rundred business, and 0:15:15.920 --> 0:15:19.040 Amazon Awls is one hundred and five billion dollar runder. 0:15:19.160 --> 0:15:22.400 The regulators have no idea what's going on. There's no 0:15:22.560 --> 0:15:24.000 way to put this genius. 0:15:24.280 --> 0:15:26.960 That's the big risk when it comes to alphabet So 0:15:26.960 --> 0:15:30.160 sounder pitch I last night did call out that risk 0:15:30.200 --> 0:15:33.080 off you know, the DOJA cases and what it could 0:15:33.120 --> 0:15:35.120 mean for the company, and that is the big risk. 0:15:35.520 --> 0:15:38.080 One hundred billion to eighty billion, I think you said 0:15:38.160 --> 0:15:41.600 forty billion, Yeah, added up, and all this stuff we're 0:15:41.640 --> 0:15:45.360 talking about runs on electricity, I believe. I mean, we're 0:15:45.360 --> 0:15:48.720 directly LinkedIn near at our world headquarters folks to Staten Island. 0:15:48.960 --> 0:15:51.160 When mister Bloomberg turns on the lights in the morning, 0:15:51.200 --> 0:15:54.840 Staten Island dims, I get it. Where's all the electrical 0:15:54.880 --> 0:15:57.760 generation for the one hundred and eighty two hundred and 0:15:57.760 --> 0:16:00.600 twenty billion dollars of business talking. 0:16:00.400 --> 0:16:03.080 About I mean the in fact, Google did mention last 0:16:03.120 --> 0:16:06.800 night they are investing in nuclear reactors or some of their. 0:16:06.840 --> 0:16:08.880 User referbed like three Mile Island. 0:16:09.160 --> 0:16:11.880 I mean, these are and they're doing it in partnership. 0:16:12.000 --> 0:16:14.960 So it's not all Google, but clearly that's part of 0:16:15.000 --> 0:16:18.200 the capex, the thirteen billion dollars in capex they invent. 0:16:19.320 --> 0:16:22.000 Some of it is going towards building new data centers 0:16:22.080 --> 0:16:22.960 and adding new and. 0:16:22.960 --> 0:16:24.840 They need water to cool, so they're going to go 0:16:24.880 --> 0:16:27.760 between John Tucker's house and the restaurant right at the ferry. 0:16:28.640 --> 0:16:30.040 I mean, is that where the is that where the 0:16:30.040 --> 0:16:30.680 plant's going? 0:16:31.560 --> 0:16:33.080 Yeah, right in my backyard. 0:16:34.080 --> 0:16:37.160 The S and P five hundred utilities index this year, 0:16:37.440 --> 0:16:37.800 that's up. 0:16:38.680 --> 0:16:42.440 Yeah, utility, it's amazing. Plus the dividend, and I feel 0:16:42.480 --> 0:16:46.280 we haven't covered it. Can Eric, can you make a note? 0:16:46.280 --> 0:16:48.640 We got to get a bunch of utility animals in 0:16:48.680 --> 0:16:51.320 here to talk about man deeps world. 0:16:51.520 --> 0:16:54.760 This is exciting. Did you expect this five years ago? 0:16:54.840 --> 0:16:58.440 Mandeep, We're talking about one gigawatt data center. I mean 0:16:58.480 --> 0:17:02.040 just think about it. Right now, we're at twenty megawatts, 0:17:02.320 --> 0:17:06.040 one gigawak data center. Yes, I did not expect this 0:17:06.160 --> 0:17:07.119 coming back quickly. 0:17:07.280 --> 0:17:11.720 So a gigawat, yeah, okay, that's a lot. 0:17:11.760 --> 0:17:15.480 One point two one gigawatts can power more than ten 0:17:15.560 --> 0:17:20.320 million light bulbs and they're all burntout in jud Tucker's basement. 0:17:20.760 --> 0:17:23.240 It can probably power the entire New York City if 0:17:23.280 --> 0:17:24.400 you think about it, you know. 0:17:24.520 --> 0:17:25.280 A gigaway. 0:17:25.440 --> 0:17:28.960 Yeah, it's like physics with Mandy coming out of Silicon 0:17:29.040 --> 0:17:30.000 down Gerarm. 0:17:29.680 --> 0:17:31.720 Okay, you get wet to give you an email coming 0:17:31.760 --> 0:17:34.160 in here. They're worried about it getting back. You're gonna 0:17:34.160 --> 0:17:36.640 be ready for Wimbledon. You're going to be ready for Wimbledon. 0:17:37.400 --> 0:17:39.880 We'll talk. We gets a free time your way. 0:17:40.040 --> 0:17:41.320 I want to talk to you about I had the 0:17:41.440 --> 0:17:45.639 honor of seeing vj Armatrov with Borg. It is peak 0:17:45.680 --> 0:17:48.320 at Forest Hills, and I really want to get time 0:17:48.359 --> 0:17:51.240 to talk to you about that man deep sing there 0:17:51.240 --> 0:17:52.840 in the middle earning season this. 0:17:53.080 --> 0:17:57.520 Here's the Bloomberg Surveillance Podcast. Listen live each weekday starting 0:17:57.520 --> 0:18:00.840 at seven am Eastern on Apple car Playrod Auto with 0:18:00.880 --> 0:18:03.840 a Bloomberg Business app. You can also listen live on 0:18:03.920 --> 0:18:07.240 Amazon Alexa from our flagship New York station, Just Say 0:18:07.280 --> 0:18:09.560 Alexa playing Bloomberg eleven thirty. 0:18:09.680 --> 0:18:10.159 When I was in. 0:18:10.240 --> 0:18:14.800 Rome recently, this was really front in center, the international 0:18:14.880 --> 0:18:19.280 view of a America's fractured politics, whatever your belief. Lindsay 0:18:19.359 --> 0:18:22.360 Newman working with Ian Bremer over at G zero, over 0:18:22.400 --> 0:18:24.240 at Eurasia Group. We're thrilled she could. 0:18:24.160 --> 0:18:26.080 Join us right now, doctor Newman. 0:18:26.119 --> 0:18:29.760 The view from sixty thousand feet, What does the first 0:18:29.880 --> 0:18:34.639 G seven meeting look like, daresay russia'sttens G eight. What 0:18:34.720 --> 0:18:37.800 does the first G seven meeting look like for President 0:18:37.880 --> 0:18:39.720 Trump or President Harris? 0:18:41.240 --> 0:18:44.040 Well, as you know, John, we're just a few days 0:18:44.080 --> 0:18:46.720 af from his election, and it has been a turbulent, 0:18:46.840 --> 0:18:51.840 tumultuous one. We've had Donald Trump, former President Trump suggesting 0:18:51.880 --> 0:18:55.320 that should he win this election on Tuesday, which remains 0:18:55.320 --> 0:18:58.280 a dead heat in anyone's game, that he would immediately 0:18:58.400 --> 0:19:01.399 begin the process of bringing the parties together in the 0:19:01.520 --> 0:19:04.680 Ukraine Russia conflict and seeing if he could bring a 0:19:04.720 --> 0:19:07.000 resolution to it. He says, the US is on the 0:19:07.040 --> 0:19:10.040 brink of World War three. Those are the stakes as 0:19:10.080 --> 0:19:12.320 he sees them, So we would have to expect a 0:19:12.400 --> 0:19:13.800 lively G seven G eight. 0:19:13.920 --> 0:19:15.960 As you say, should it. 0:19:15.880 --> 0:19:19.280 Be Trump Harris, you know, as you know, the big 0:19:19.320 --> 0:19:22.280 threadline and I feel it too, is that it's a 0:19:22.280 --> 0:19:26.080 bit of an unknown. She has tried to associate herself 0:19:26.119 --> 0:19:30.359 with Biden administration's successes, perceive successes. She has tried to 0:19:30.400 --> 0:19:33.240 distance herself from those areas where it may have fallen short. 0:19:33.280 --> 0:19:36.000 Of course, Trump is always talking about Afghanistan, and Afghanistan 0:19:36.080 --> 0:19:39.320 is a key sticking point on US foreign policy. But 0:19:39.400 --> 0:19:41.600 there's a lot of unknown there on what a Harris 0:19:41.680 --> 0:19:44.159 presidency would mean on foreign policy, and we have to 0:19:44.200 --> 0:19:46.240 expect it would look a lot like what we've seen 0:19:46.280 --> 0:19:49.439 before from the Democrats. So those allies in the G 0:19:49.560 --> 0:19:52.639